Higher prices in India since the last seven months led to a rise of 42 per cent in the imports of black pepper during the April-October period. The country imported 11,500 tonnes of pepper compared with 8,100 tonnes in the same period last year. Interestingly, the exports during the period were also 11,500 tonnes.
According to experts, India would turn a net importer of the spice by the end of the current year since overseas prices are still low. Indian prices are higher by $250 a tonne on an average since the last seven months compared with prices in other major producers like Vietnam and Indonesia.
Currently, Vietnam offers V-ASTA at $ 3,125 a tonne (FoB- HCMC), Lampong ASTA is available at $ 3,050 a tonne while the India offers $3,350 a tonne for the same. Almost cent per cent of units in SEZs and
EOUs are dependent on imported pepper due to this price advantage in the global market.
The local market is mainly driven by speculative forces in futures trading which makes India the least attractive destination for leading importers such as the EU and the US. As local and overseas demand is limited now, there is a consolidation of stock in commodity exchanges which in turn is likely to lead to a sharp fall in prices once fresh season’s harvesting is in full swing.
According to Kochi-based traders, this may happen by next month as supply of fresh pepper has just begun.
Market is poised for a fall in prices by January-February when harvesting in India and Vietnam, two major pepper producers in the world, will be in full swing.
Initial estimates indicate that India will have a slightly higher production this time at around 55,000 tonnes. In 2009 season, as per the statistics of the Spices Board total production was 50,000 tonnes.
Reports from Vietnam indicate almost a similar production this time at 120,000 tonnes, though Vietnam Pepper Association estimates the output to be around 90,000 tonnes.
Exporters confirm that there would not be a sharp fall in production and no serious supply crunch in 2010 season. Even after shipping 125,000 tonnes Vietnam still offers pepper at a much cheaper price than India.
Source : Business Standard